Cons And Limitations Of Pepsico

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Another factor that PepsiCo feels may affect their business is additional labeling or warning requirements or limitations on their product packaging (PepsiCo, 2016). New regulations may require companies to provide a label that highlights perceived concerns about a product or warns consumers to avoid consumption of certain ingredients present in their products on each product (PepsiCo, 2016). For example, in California, Proposition 65 requires a specific warning on any product that contains a substance listed by the State of California as having been found to cause cancer or birth defects if the levels of the substance are above a safe harbor level (PepsiCo, 2016). These new regulations could reduce the overall consumption of their products, lead to negative publicity or leave consumers with the perception that their products do not meet their health and wellness needs (PepsiCo, 2016). These regulations could ultimately negatively affect PepsiCo’s business, financial condition or results of operations (PepsiCo, 2016).

Overall, PepsiCo Inc. appears to be in a positive position financially. They appear to be generating enough revenues to sufficiently cover their cost and make a profit, and they have a respectable gross profit margin. According to Yahoo! Finance their specialist awarded PepsiCo with a 2.3 recommendation rating, this rating recommends that investors buy or hold their PepsiCo stock as shown in the table to the left (“PEP Analyst Opinion |Analyst Estimates

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